That actually depends on your school. There can be huge differences even within a district. You realy need to find out the norm for your school and perhaps even for the class into which your DD is going. I was privy to some surprising information when DS and DD were in K. Eight percent of the K classes in the school where DS/DD are enrolled were held back and repeated K. I was told that had these children been at a few of the other schools within our district a few of them would have been proceeded to first grade. Rising first graders need to have mastered basic phonics (letter and letter sounds) as many K/1st/2nd tests required competency in phonics. They also need basic sight words (probably 100 or so). If they have the basic phonics and basic sight words, then they would be able to read basic sentences going into first grade.
There are huge variations in reading levels for K/1st/2nd grades, which appears beyond just differences in intellegience levels. By early first grade, DS could read Harry Potter but DD was more at the level of Magic Treehouse. Both were in the "advanced" class (about top 20% of entering 1st graders) and there were definitely kids at DD's level although I can't say for sure beyond that.
If your DD is reading basic sentences, she should be okay at most schools, just likely not near the top for many schools as far as reading level (not talking about intelligence). However, also keep in mind that high ability kids often don't develop in the same way as typical kids either. I don't think either DS or DD were reading prior to entering K although DS was able to read kiddie "pseudo-chapter" books (Maurice Sendak's Litle Bear) early in K when I decided to check his reading ability.
Keep in mind too that some of the "standards" floating in cyberspace may be out of date. I do know that the expectations have changed greatly in the last five to ten years for our district. It is due to having kids start school later and all the emphasis on standardized testing, etc.
