I am receiving this error while testing my app.
The app is signed and uploaded to the alpha testing portion of the developer console.
The in-app item has the status "Active".
I have entered an account other than my developer account in "testing access".
I am using a device with the primary account in the "testing access" and not the developer account.
I have double checked the spelling of my SKU.
The exact same .apk was uploaded to Developer Console and installed on the test device.
I have double checked the license key.
I have waited more than 12 hours for SKU and testing accounts to be propagated.
Everything appears to work when I use android.test.purchased.
There are multiple questions concerning this error. Related links that got me this far include: https://groups.google.com/forum/#!topic/android-developers/A2RM4P34zo0
How to resolve “The item you were attempting to purchase could not be found”
"the item you were attempting to purchase could not be found" after following instructions
"the item you were attempting to purchase could not be found"
http://developer.android.com/google/play/billing/billing_testing.html#billing-testing-test
Testing Android In-App purchases with unpublished apps
Android in-app purchase for alpha test mode
Error: the item you were attemping to purchase could not be found
https://stackoverflow.com/questions/23917264/item-could-not-be-found-in-app-billing-issue
In App Billing - product not found
Android billing - item not found
http://developer.android.com/training/in-app-billing/list-iab-products.html
Do test accounts require real credit card to purchase via In-app Billing?
What else can be causing this error?
One time I got past this point. My wife's phone and account are used for testing. It appeared to work after including her account to have testing access and waiting 3 hours. The item was found and it asked to verify her account password. I handed her the device, she entered the password, she said there was an error and closed the dialog. I do not know what that error was, and I have not been able to get back to that point. I am certain that the item was not purchased, because it does not show up on the owned list. After this, I used another device with another account and another 3 hours. The new device never gets anything other than the item not found error while using the active SKU.