The study aimed to develop a criterion-referenced test to determine whether the fifth grade students in the Basic Education in Oman master both Addition and Subtraction of natural numbers, and to obtain the appropriate cut-off scores for mastery decisions of the students. Moreover, the study aimed to investigate the psychometric properties of the mastery decisions based on the test scores. The development of the test went through several stages: the test content was specified and was analyzed into behavioral measurable objectives, the items were written and judged for descriptive validity. To determine the initial psychometric properties of the test, it was administered to two random pilot samples, each consisted of 101 students from grades (2, 3, 4, 5). Then, the reliability and the domain selection validity were verified. To determine the cut-off scores for the Addition and Subtraction for fifth grade students, the test was administered to stratified sample of 1877 students from grades (2, 3, 4, 5) from regions of Batinah South, Al Dakhiliya and Muscat. The cut-off scores were determined by using the Contrasting Groups Method. The highest 50% students of grade five were assumed to be a mastery group and the whole students of each grade of (2, 3,4) were assumed to be non mastery groups. Three cut-off scores were obtained for the subtest scores: total Addition score, Horizontal Addition score, Vertical Addition score, score of each objectives of the sixteen behavioral objectives of Addition, total Subtraction score, Horizontal Subtraction score, Vertical Subtraction score, and score of each objectives of the sixteen behavioral objectives of Subtraction. The cut-off scores for the Addition were bigger than the common mastery level and bigger than the cut-off scores for the Subtraction, The psychometric properties of the mastery classification decisions of grade five students were determined and the results showed that the test of Addition and Subtraction had both functional validity and high reliability.