1. Correct Answer: Option C: 1 sq cm
 2. Explanation:
     To solve this problem, we need to determine the side length of each square and then calculate its area.
     ● Step 1: Understand the arrangement of squares.  
           ○ There are three rows, each containing four squares.
           ○ Therefore, there are a total of \(3 \times 4 = 12\) squares.
     ● Step 2: Determine the dimensions of the rectangle.  
           ○ Since there are four squares in each row, the length of the rectangle is \(4s\), where \(s\) is the side length of each square.
           ○ Since there are three rows, the width of the rectangle is \(3s\).
     ● Step 3: Use the diagonal to find the side length.  
           ○ The diagonal of the rectangle is given as 5 cm.
           ○ Using the Pythagorean theorem for the rectangle, we have:
         \[
         \text{Diagonal}^2 = \text{Length}^2 + \text{Width}^2
         \]
         \[
         5^2 = (4s)^2 + (3s)^2
         \]
         \[
         25 = 16s^2 + 9s^2
         \]
         \[
         25 = 25s^2
         \]
         \[
         s^2 = 1
         \]
     ● Step 4: Calculate the area of each square.  
           ○ The area of each square is \(s^2\).
           ○ Since \(s^2 = 1\), the area of each square is 1 sq cm.
     Therefore, the correct answer is Option C: 1 sq cm.