I´m testing my in-app billing and followed the following steps:
Uploaded APK to the Market, created In-App items and published them (did not publish the app itself),
This error is telling you that you didn't add the item on Google play developer console under in-app product
Steps to add item
Note : If you click on Save button than the item in only save on your in-app products and it's still not active to use. you have to manually activate the item and wait for 2 or 3 hours to be active.
Most important : If you want to activate your item immediate than you have to click on Activate button at step 8. it will activate you item immediate and save it automatically.