I agree with everyting MoiraWendy Miller stated. In addition, in US English, it is very common for "What's going on?" to be used as a VERY generic greeting. When used in this manner, it doesn't even need a 'correct' reply. Here are some examples: A- What's going on? B- Nothing. What's new with you? A- What's going on? B- Same old stuff. You? A- What's going on? B- How you doing? (Note the lack of the word "are"; this is extremely informal, not to mention a bit sloppy.) A- Hi, Luis. How are you today? B- What's going on?

Hello Luis. Usually we say that when something is happening, but we're not sure what. Maybe there is a crowd of people... they are shouting and pointing... and you ask someone "What's going on?" And the answer might be, "There's been an accident!" or "Angelina Jolie is walking down the street in a bikini," or "Someone's robbing the bank!" Now you know what's going on. You can ask "What's going on?" whenever you are not sure what is happening.. but want to know.

to answer such question you need to explain the situation which was asked about

You could answer just about anything. Just give him the latest in your life.