So duolingo is what I'm using to help memorize and learn hiragana at the moment. However, when the ask me to write alcohol, sake, sometimes they say it as osake, is this still right or should I just pronounce it as sake?
Osake and sake both are referring to alcoholic beverages, and are both correct. The kanji for these would be お酒 and 酒, respecitvely. As you can see, there is an お / o in front of the kanji. This is because Japanese sometimes adds honorific prefixes, such as お / o and ご / go, to certain words to make them more polite. However, some words have completely different meanings without the honorifics, such as お巡りさん (omawarisan).
As a general observation, between sake and osake, most people say osake when referring to alcoholic beverages. Although, beer and wine are referred to as ビール and ワイン, respectively, and お酒 / 酒 usually only refers to Japanese alcoholic beverages. In some cases though, お酒 / 酒 can encompass alcoholic beverages in general, including beer and wine.