I uploaded my first app to iTunes Connect (iOS 8, iPhone) and it\'s now available through Apple TestFlight for internal and external testers. I created a Non-Consumable<
TestFlight users don't require a sandbox account, but they will test against an automatically created sandbox account.
Sandbox Accounts
The moment a tester opens your application, a sandbox account is created for them. This means it's no longer necessary to create test accounts in iTunes Connect. Testing In-App Purchases was never easier.
Source
Note that your TestFlight user is a legitimate App Store user. That user will be purchasing, restoring, etc. from the IAP in the Sandbox as opposed to the real IAP.
On iTunes Connect, the IAP can be "Approved" or "Ready to Submit" (or any other status, I think).