Teacher said "Test" and I said "Why?"

I can study and study and know that I know my information. It's just something about that moment when the test is in front of me that I second guess myself. Is this a normal part of testing or was it just me? I can study with my sons all week before they take a test and on test day I can say "Are you ready?" and they will say "no", but I know they are ready because I've sat with them a whole week and studied the information.  After they finish the test I can say "how did you do son?" and his answer is " I guess I past, or I forgot this part or that part." When the teacher sends the information home and I review the answers he got wrong and he get it right then I will ask, why didn't you answer correctly during the test, I know you knew this, and he will say "my mind just went blank!"
So question, how can one test determine if you have obtained the knowledge needed.  There are many people who does not test well, and it's not fair to have a test to determine pass or fail.  I feel that a test should be given at the beginning of the year. This is just to see how much information the person already knows, test throughout the year and a test at the end to compare what the child knew at the start of the year and the knowledge obtained through out the year.  I feel that some verbal test should be given, along with papers and reports. 
Many people say they love true and false type of test. But personally I dislike them. I do not do well with true or false.