"Ella supone que no."
To me, 'she supposes not' is possible, but awkward. However, the other translation, "She assumes that no" is not correct on its own, it is incomplete. I am not sure why my answer, "she supposes it is not" is different than "She supposes not", unless they mean "She does not suppose" in a Shakespearean way. Not sure.
This is a false dichotomy between written and spoken languages. Good translations are good translations whether they are written or spoken. Errors in duolingo's exercises are being perpetuated in the poor translations the site is coming up with. It's essential to help duolingo improve the crowd sourced translations, not enable the errors in basic teaching.