meaning of 'test out of' ?

I came across this phrase reading a book.
I looked up a dictionary but couldn't find it.

the whole sentence is 'Kenny tested out of freshman Algebra'.
I suppose you don't need any more context to figure it out so I've quoted only target sentence.
what's that mean ?



and I have another question, if you don't mind.

what's 'that' mean as in 'That 70's Show' ?
is it just normal 'that' as in 'ah, I remember 'that' event of '70s' or does it have some connotation in it?

>'Kenny tested out of freshman Algebra'.

It means Kenny took a test and passed it, so his university will give him credit for the course without him actually having to sit through it. The test shows he's already mastered the material.

>is it just normal 'that'

Yes.

re: "That 70's Show"

Yes, no additional meaning. It makes it sound like the show is something people are already familiar with. In my opinion as a native speaker, it sounds odd.