Handklæðið hangir á stólnum, og sápan er í litlum skáp í baðherberginu.

The towel hangs on the chair, and the soap is in a small cabinet in the bathroom.

Breakdown of Handklæðið hangir á stólnum, og sápan er í litlum skáp í baðherberginu.

• vera: to be
• lítill: small
• á: on
• stóllinn: the chair (subject)

Questions & Answers about Handklæðið hangir á stólnum, og sápan er í litlum skáp í baðherberginu.

Why does handklæði become handklæðið?

Handklæði means towel. Handklæðið is the definite form (the towel). Icelandic usually marks the by adding a suffix to the noun:

• neuter singular often ends in -ið → handklæði → handklæðið
  So the noun itself carries the meaning of the.

Why is the verb hangir used, and what form is it?

Hangir is the present tense, 3rd person singular of hanga (to hang).
Because the subject is handklæðið (the towel, singular), you use the singular verb: handklæðið hangir = the towel is hanging.

Why is it á stólnum and not something like á stóllinn or á stólinn?

The preposition á changes case depending on meaning:

• á + dative = location (on, stationary)
• á + accusative = motion/direction (onto)

Here it’s describing location (the towel is already there), so it uses dative:

• stóll (chair) → dative singular stól/stól-
  • definite ending -num → stólnum (on the chair / on the chair-the)

(If you were putting it onto the chair, you’d use accusative: á stólinn.)