Depending on your watch, there are two ways to answer a call. When a call comes in, you'll see the name of the caller, the phone number, a green answer icon on the left, and a red hang-up button on the right.
To answer the call, you can tap the green answer button on the left and swipe your finger to the center of the screen. As you do, the green button will get larger. Alternatively, if your watch has a rotating bezel, you can rotate the bezel clockwise. As you do so, you'll see the same green button animation.
Once the call is answered, you'll see the call timer, the name of your caller, three other buttons, and a hangup button. You're free to speak to your caller through the microphone on the watch. The caller will speak to you through the very tinny speaker on the watch. To hang up, press the red hang-up button.