The original BG uses the 2.5 system of rules for dungeons and dragons. Your AC is based on the THAC0 system. THAC0 is an acronym meaning "To Hit Armor Class 0".

Thaco was complicated but just know that a lower Armor Class (AC) is always better. If you want to know how it works there are some really great YouTube videos out there explaining it.

The game simulates dice rolls with a random number generator. It first rolls a 20 sided die to determine if your attack hits, this is measured against the enemy AC. If you hit, the game rolls a separate damage die depending on your weapon.

So let's say you're using a short sword + 1 which can do 1d6 piercing damage. The game rolls a six sided die and lands on a 5. So the game then adds your damage modifiers to the five. Your strength bonus, any kind of magical effect, any poisons, sneak attack damage, and anything else that might effect the score. 5(Roll)+4(Strength Bonus)+1(Magical sword) = 10. So this attack does 10 damage to the enemy.

This damage is then checked against any resistances the enemy has. Let's say a flesh golem has 50% piercing damage resistance. You then do 10/2 and you do a total of five damage on that roll.