It is a common practice for many schools and colleges to assess their student's knowledge through different exams and tests. Whether this method has more benefits than drawbacks is debatable; I believe that examination(s) provide several educational benefits.
To begin with, one of the main advantages of examination(s) is that it is (they are) an easy tool to regularly assess a student's capability. Exams help a lot to bring an improvement in the individual's knowledge because they provide regular feedback to the students who acknowledge their shortcomings and work on them.
Another advantage is that exams promote competition among students. They work harder to improve their knowledge and skills. In this way they learn more. Also, exams are an excellent tools to determine the efficacy of teaching methods because teachers get an opportunity to monitor and evaluate their teaching stategies according to their student's progress.