Why does water act as an acid when ammonia dissolves in it?

Water acts as an acid when ammonia dissolves in it because it functions as a proton donor in the presence of a base. According to the Brønsted–Lowry definition, an acid is a species with a tendency to lose a proton, while a base is a species with a tendency to gain one.123

Because water is amphoteric—meaning it can act as either an acid or a base depending on the environment—it reacts with ammonia by donating a proton to the ammonia molecule. This reaction is represented by the following equation:31

$${\text{H}}_2\text{O}+{\text{NH}}_3\rightleftharpoons {\text{NH}}_4^{+}+{\text{OH}}^{-}$$

In this process, the water molecule is converted into a hydroxide ion (${\text{OH}}^{-}$), while the ammonia molecule accepts the proton to become an ammonium ion (${\text{NH}}_4^{+}$).12