How would the device know if there is a collision on the media, or if it receives a frame that should be dropped in Ethernet based networks?

By matching the value of the frame length field in the ethernet frame and the actual length of the data payload.If they matched each other so there is no collision, if they didn't match each other so there is a collision on the link.

Carrier sence multiple access with collision detection, zipping it to CSMACD this is the media access control used in the dark ages :)