How does Bilbo show good sense when the dwarves come upon the treasure?

Bilbo demonstrates good sense when the dwarves discover the treasure by urging caution and emphasizing the importance of not letting greed cloud their judgment. He understands the potential dangers of the treasure, particularly the dragon Smaug's wrath and the corrupting influence of wealth. Bilbo's pragmatic approach helps to keep the group focused on their original goal rather than getting lost in the allure of the gold. His foresight ultimately helps them navigate the challenges that arise from their newfound wealth.