I was asked this by a child 10-12 years ago (long before T). I was standing in line at the pharmacy and a 4/5 year old was standing there. He said, "Are you a girl or a boy?". I was very amused and said, "Well, what do you think?". He looked me up and down and then said, "Well, I think you are a boy because you are wearing a man's watch and men's shoes". And I just said "correct". He just smiled. The mother was promptly grabbing the kid's arm to pull him away and apologizing, but I smiled and told her it was ok. He could have said "girl because of blah blah blah", and I would have said correct. Being correctly gendered by a child is less important to me than having them think about gender...even if in this case it was the stereotypes that told him I was male. I just loved that he paused and tried to think it through.
I knew the kid was two young to understand/there wouldn't be enough time to explain how sometimes girls wear boy watches and are still girls, or anything. That would have been great though.
I would take the same approach again, if asked. I see no reason to get upset about it. They are not asking because they want to mock us (at least at that young of an age), they are asking because we live in a world that genders people the moment we see them, and they can't put us into a category. So, they "need" to ask. Kids at that age will accept what you tell them. They will say "ok" and then go off to play. They really don't give a rat's a**, they just need to know how to classify us. Gender is very black and white at that age.