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A small group of aerobic bacteria that uses inorganic compounds as an energy source is a nitrifying bacterium. This is significant in and of itself for soil ecosystem function since it helps to limit soil nitrogen losses by leaching and nitrification of nitrate.

The process of converting nitrogen to ammonia is called ammonification. The method of ammonification is performed by fungi and prokaryotes, which decompose the tissue to release inorganic nitrogen.

Thus, conversion of nitrogen gas to ammonia is not done by nitrifying bacteria.

Therefore, the given statement is incorrect.

The ammonia released from organic compounds, which are then returned to the soil, comes under ammonification, performed by fungus and other prokaryotes. Prokaryotes and fungi release inorganic nitrogen back to the ecosystem as ammonia.

Thus, nitrifying bacteria do not release ammonia from organic compounds.

Therefore, the given statement is incorrect.

The process of converting ammonium to nitrate is called nitrification, which is performed by nitrifying bacteria. Further, after the nitrification, plants absorb ammonium and nitrate and then convert them to nitrogen-containing organic molecules.

Thus, nitrifying bacteria convert ammonium to nitrate, which plants then absorb.

Therefore, the given statement is correct.

Incorporating nitrogen into amino acids is a process called assimilation. It is done by fungi, plants, and bacteria that cannot fix nitrogen and depend on assimilating nitrogen for their needs.

Thus, incorporating nitrogen into amino acids is not done by nitrifying bacteria.

Therefore, the given statement is incorrect.