Translation:My friend and I touched an elephant.
Because the word "tocamos" means "we touch" and "we touched". They might be different words in English, but they are not in Spanish, it's just something you have to get used to. You would know which word was intended by the context of it in a conversation, for a start if you are talking to this person face-to-face then you would know if they were talking about now (the elephant in the room) or in the past, also words like "ayer" (yesterday) may be in the sentence, clarifying that it was in the past.
It is a present simple sentence and it isn't present continuous. If you want to write "My friend and I are touching an elephant." your correct sentence is: "Mi amigo y yo estamos tocando un elefante." But anyway these are illustrative sentences, in the life it is better the present continuous version, I guess.
The thing is, over time you go back and do lessons again, after you have learnt these new things. I think that ALL correct answers should work when entered by the user, but maybe they need to be careful when choosing possible answers for multiple choice. Having said that, missing a correct answer and losing a heart when you find out that a word can mean both present and past tense, for example, seems harsh at the time, but it does teach you something, so I think it works as is.