Here is the procedure that I use on all small engines to check the regulator.
• Regulator Ground Test: Insure the regulator body is grounded or grounding wire is fastened tight to a good ground (you should verify this by checking continuity from regulator body to chassis ground).
• Fwd/Reverse Bias Test/Diode Test: This check is testing the Diode function to ensure it is regulating the AC current from the stator into DC Current.
1. Switch multi meter to Diode Scale.
2. Place your Multi meter positive lead on each AC output wire.
3. Place your multi meter negative lead on the battery Charge wire.
4. The meter should read voltage typically around 0.5 volts.
5. Next, switch your multi meter leads putting the negative lead on the AC output wires and the Positive lead on the Battery Charge Wire.
6. The reading should be Infinite.
7. With your meter on the same setting, place your multi meter positive lead on the regulator ground wire or to the regulator directly, and then place your meter negative lead on the AC output leads.
8. The meter should read voltage typically around 0.5 volts.
9. Next, switch your multi meter leads putting the negative lead on the regulator ground and the Positive lead on the AC output wires.
10. The reading should be Infinite.
If any of those tests fail, then one of the diodes are shot and the regulator should be replaced (unless you are a true geek and like to tear things apart so you can replace the actual diodes.)