I think the time is set automatically when you connect to whispernet and the machine keeps track as long as it is on. If you don't have whispernet, it's probably set to whatever time it was at Amazon, from whence it shipped. If you re-boot it may go back to that time. I don NOT believe there is anyway for it to, say, talk to your computer via USB to correct the time.
But I'm sure there's someone around here who knows more and/or can explain it better.
A forum community dedicated to Amazon Kindle owners, authors, and enthusiasts. Come join the discussion about publishing, audio, troubleshooting, models, styles, reviews, accessories, classifieds, and more!