I Didn't Teach Her That

Jim bought the kid some modeling clay. She got right down to constructing herself some Angry Bird Space creatures. Jim and I are talking when all of a sudden the kid says, "This clay compound is working out well."

Ummmm. 

Jim and I stared st each other for a few heartbeats. 

"Did she just say what I think she said?"

"She did."

"I didn't teach her that."

"Neither did I."

I do not get it. It makes me laugh but I don't get it.