When ammonium chloride (NH4Cl) dissolves in water, the process absorbs heat from the surroundings, leading to a decrease in temperature. This indicates that the energy required to break the ionic bonds in ammonium chloride and the hydrogen bonds in water exceeds the energy released when new interactions are formed.
Since the reaction absorbs energy and results in a temperature drop in the environment, it is classified as an endothermic reaction.
Therefore, the correct statement is: An endothermic reaction is occurring.