Merchandise sold fob shipping point indicates that:
a. the seller transfers title to the buyer once the merchandise is shipped.
b. the merchandise has not yet been shipped.
c. the merchandise will not be shipped until payment has been received.
d. the seller holds title until the merchandise is received at the buyer's location.

The correct answer is A: The seller transfers title to the buyer once the merchandise is shipped.

Explanation:

F.O.B. (Free on Board)  is an incoterm 2010. Incoterms are practical rules in international commerce. Practical means they are not obligatory. Incoterms helps determine when the responsibility of each part changes, the cost of freight and insurance.

In this case, in the incoterm F.O.B terms the seller bears all costs and risks up to the point the goods are loaded onboard the vessel.  It requires a seller to deliver goods on board a vessel that is to be designated by the buyer in a manner customary at the particular port. The seller must arrange for export clearance.

The buyer pays the cost of marine freight transportation, bill of lading fees, insurance, unloading, and transportation cost from the arrival port to destination.

To clarify, the seller must pay the internal freight, insurance until the goods are on board, and held the responsibility to the point in which the goods are on board in the negotiated manner.