This work describes a program, called TOPLE, which uses a procedural model of the world to understand simple declarative sentences. It accepts sentences in a modified predicate calculus symbolism, and uses plausible reasoning to visualize scenes, resolve ambiguous pronoun and noun phrase references, explain events, and make conditional predications. Because it does plausible deduction, with tentative conclusions, it must contain a formalism for describing its reasons for its conclusions and what the alternatives are. When an inconsistency is detected in its world model, it uses its recorded information to resolve it, one way or another. It uses simulation techniques to make deductions about creatures motivation and behavior, assuming they are goal-directed beings like itself.