unfortunately, in the real world sight reading and playing with other musicians often conflict in this sense. The root of the problem: enharmonics.
When a key signature is designated as a sharp key, all the notes are sharp that need to be. the same case as in flat keys.
For example: key of F#. notes are F#, G#, A#, B, C#, D#, E# because you need 1 of each note, and since its a sharp key they must be sharped.
Which may be cool if strictly sight reading, but what musician say "we're in the key of F# and then mentions an E#" ? Most likely he/she will call it F. Now this one may probably not get u confused, but most musicians i've ever played with always calls G# => Ab, A# => Bb, and D# => Eb regardless of what key we're playing in. In my playing circles the black keys are ALWAYS C#, Eb, F#, Ab, Bb no matter what key you are in, and that totally clashes with the standard music theory notation.
What i do is (totally necessary playing keys) is learn what notes are in the key as well as their associated interval rather than the sharps and flats. I guess that would help me that if i saw a note without a natural sign and that natural note isnt in the key, then it has to be sharp or flat depending on the key.