how to use testfield function with example

You generally use it when a field is mandatory.
For example, you can put in the insert-trigger or modify-trigger something like:

TESTFIELD("Some Mandatory Field");

If that field is blank, an error will be raised.

Another use is this: if you fill in a certain value in a certain field, another field needs to have a certain value (generally it needs to be blank):

IF "Field 1" = 'Some Value' THEN
  TESTFIELD("Field 2",'Some Other Value'); //or TESTFIELD("Field 2",''); if it needs to be blank