I removed old chair rail from the wall in my bedroom. There is a impression on the wall. Can I patch this with drywall compound?
Yes you can. First indent any nail holes so the frayed paper doesn't stick out, then fill with successive thin layers of drywall mud.
If your drywall has a finish to it other than smooth, try to finish the repair the same way as the finish, to blend it in. Otherwise, it will bother you. Some finishes require knowledge in drywall application.