"You are not drinking the water."
Translation:Ni dricker inte vattnet.
Heheh how should i know here if it was for a single person or for a plurel? :-P
Contextually, although that said, it's not that common to say ni to a single person, and there's practically never a reason to do so as a foreigner.
Either way is fine - use du if it's one person and ni if you're talking to two persons or more.
One is singular other is plural in Swedish, but "you" is in use for both in English, that part of the test needs a bit more work i guess, maybe adding images to questions will help.
Why is "du" not an accepted answer? There is no indication that it is being told to a group of people or a singular person. Both "du" and "ni" should be accepted as correct answers.
They're both accepted. But I can see you left an error report (which is great) - your report reads du dricker inte vatten, which means "you don't drink water". The sentence is in the definite: du dricker inte vattnet = "you don't drink the water".