Thanks to markys' comments I was able to figure out the problem. Since the gdb client is what parses the symbols and not the server, I had to make sure the client knew the full path to a copy of the executable. Since 'test' was not in the current directory for the command prompt that was used to run gdbtest it did not have a copy of the symbols to use. adding the the binary to PATH for the terminal running the client solved the problem. Thanks.
Summarizing:
- server side:
gdbserver --multi :port "path-to-executable"
- client side:
gdb "path-to-executable" (gdb)> target remote "ip-of-the-remote-device:port"