Standardised educational assessments are now widespread, yet their development has given comparatively more consideration to what to assess than how to optimally assess students' competencies. Existing evidence from behavioural studies with children and neuroscience studies with adults suggest that the method of assessment may affect neural processing and performance, but current evidence remains limited. To investigate the impact of assessment methods on neural processing and performance in young children, we used functional magnetic resonance imaging to identify and quantify the neural correlates during performance across a range of current approaches to standardised spelling assessment. Results indicated that children's test performance declined as the cognitive load of assessment method increased. Activation of neural nodes associated with working memory further suggests that this performance decline may be a consequence of a higher cognitive load, rather than the complexity of the content. These findings provide insights into principles of assessment (re)design, to ensure assessment results are an accurate reflection of students' true levels of competency.