ADC testing is an important activity which plays main role in deciding accuracy of a system. Many applications observe measurement using ADC. Such application entails high accuracy and resolution, thus it is provided by signal's dynamic range. The values of ADC parameters can be improved in future by increasing the number of samples, frequency and overdrive. the test algorithm can be applied to real time ADC experimental analysis. Modified code density algorithm that reduces the effect of errors on the histogram data. This algorithm can achieve the same level of accuracy as that of the conventional code-density algorithm but using a significantly smaller number of samples, which means shorter test time and lower test cost. The new method is very efficient and can be used to enable testing of high-resolution ADCs with better coverage and reduce the time and cost of testing medium-resolution ADCs. Sophisticated test instruments required for testing high resolution and high speed ADCs are expensive and bigger in size. Therefore the test methodology followed for new methods of testing is to simulate ADC transfer function with software using sine wave as stimuli inputs.