They know damn well when they've been bad or good, and they're way smarter than we sometimes give them credit for.
But, do the or is this based on what we consider, what we rad into their behaviours. We can't possibly know what they actually think (at this point).
and that's why I'd bring them under the construct of laws of good and evil.
But again, we are applying human definition to an unknowable.
Tests show that dogs read human emotions about as well as we do, I heard. I really think the whole "they're only animals, we're just anthropomorphising" is wrong. Maybe they're only as smart as very small children, but they are smart, emotionally, in a human way. That's just what I think, anyway. :)