My hubby is the funniest guy around... the littles were arguing in the other room. He says, "Listen Grasshopper, soon you will hear a fist cutting through the air - followed by a wail." He goes on to explain not to worry, we will know exactly what happened... The offender will begin yelling "Sorry, Sorry, sorry!!" and be upset that the hurt sibling doesn't immediately stop crying with the magical word. They are then completely surprised that as parents, we have any idea what is going on.
The funniest part, as he says, is the fact that as kids we too couldn't figure out how Mom & Dad always knew what really happened... Did they have eyes behind their head? How were they all knowing? Is it possible we too were that obvious? Of course!