By 5 years, most children will

use sentences that sound almost like an adult
be able to say most speech sounds correctly
explain what familiar words mean
use sentences to describe objects and events
explain how to solve a simple problem
follow related directions, like "get your crayons, make a picture and put it on the fridge"

How YOU can help your child’s speech and language grow (4 - 5 years)

talk about your activities when you are together
show your child different ways to use words (examples - use words that mean the same thing, words that are opposites, "pretend"words, rhyming words)
don't expect perfect speech and try not to ask your child to show how well he/she can say things in front of others
ask your child to help you plan activities such as making a special meal
talk with your child as you would anybody else
read longer stories with your child
let your child make up stories for you
let your child play with other children