This test is run by the motherboard. Hardware devices such as memory, PCI, AGP and more are being checked. the BIOS system is also checked for normal functionality.
in case of an error, the result is heard as a set of beeps in different frequencies (like Morse codes).
the beeps differs between different Bios manufacturers.
To understand the meaning of the beeps you can read the following sites:
or use this nice tool that sums it all in one place:
Download: Beeping Bios Codes Tool
Some more helpful information about Bios can be found in these guides: