I've been reflecting lately on some of the lessons I've learned since becoming a teacher that they DON'T teach you in classroom management. Here's one of them: When a student tells you that another student said a "bad" word, do a little investigating. The word is not always what you think!
Yesterday I had reports in back to back classes of students saying bad words. The first report was that a student used "the 'b' word", and after talking to both students in the hallway, the word you're thinking was confirmed.
In the next class period, a student told me another used "the 't' word". I was so confused trying to come up with a bad word that started with the letter "T". I tried asking her to spell the word, to tell me something that rhymed with it, to whisper it in my ear so I could figure out what really happened. She refused, only telling me "it's inappropriate" and "it's a bad word".
The accused denied having said a bad word. He told me that he told another student, who laughed about it, that he looked like a turtle. My theory? I think he either said "turd" or she thought she heard it. Either way, not a nice word, but certainly not a "bad" word in my book.
On a slightly related note, you should also investigate when it appears as though a bad word is written on artwork. A student was checking in with me when he thought he was finished with a painting. It appeared that the "f" word was written on his artwork, and I was shocked! I asked who wrote it, and he immediately looked confused. That's when I remembered that I was speaking to a 1st grader, who had drawn what appeared to be a truck on his paper. He had tried to label his drawing, left out the "r", and accidentally made his "t" curve at the top.
Summary: Take a minute to think and investigate. The "bad" word may not be what you think! :)