Entity type &1 cannot be used

What causes this issue?

Entity type &V1& either does not exist in data model &V2& or it does not
have the storage and use type <ls>Changeable via Change Request;
Generated Database Tables</>.

System Response

The system issues an error message and will not allow you to continue with this transaction until the error is resolved.

How to fix this error?

Select a suitable entity type using input help.

Procedure for System Administrators

Error message extract from SAP system. Copyright SAP SE.