To test an AC transformer like a furnace transformer with a multimeter, start by ensuring the transformer is disconnected from the power source to prevent electric shock. Set your multimeter to the AC voltage setting. Next, connect the multimeter leads to the primary winding terminals of the transformer if you’re looking to test input voltage, or to the secondary winding terminals if testing output voltage. Activate the multimeter and check the readings. For a functional furnace transformer, the AC voltage reading should match the specifications outlined in the unit’s datasheet. If you suspect an issue, you can also check continuity by setting the multimeter to the ohm setting, connecting the leads to each terminal of the winding. A reading close to the rated resistance indicates a healthy winding; infinite resistance suggests an open circuit while very low resistance indicates a short circuit. In case of any malfunction, consider a replacement or further diagnostics of the transformer. Always ensure safety protocols are followed during this testing process.