If a person walking in front of you were to drop a wallet, most people would react by picking it and handing it back to the owner. Unless it’s a thief who would consider it an early Christmas gift from Santa.
In as much as kids know the difference between what is considered good and bad, what is right and what is wrong and what is considered virtuous and what is vicious, their reaction is not as straightforward. They first analyse the situation, debate about it and then make a decision about what to do. Due to childhood innocence, most of end up doing the right thing on encounter with these kinds of situations.
Watch the following recorded video of kids who are left at a bus stop by their mothers and their cute reactions when a stranger drops a wallet or a purse and the internal struggles they go through.