First-principles calculations play a key role in understanding the interactions of molecules with transition-metal surfaces and the energy profiles for catalytic reactions. However, many of the commonly used density functionals are not able to correctly predict the surface energy as well as the adsorption site preference for a key molecule such as CO, and it is not clear to what extent this shortcoming influences the prediction of reaction or diffusion pathways. Here, we report calculations of carbon monoxide diffusion on the Cu(001) surface along the [100] and [110] pathways, as well as the surface energy of Cu(001), and CO-adsorption energy and compare the performance of the Perdew-Burke-Ernzerhof (PBE), PBE + D2, PBE + D3, RPBE, Bayesian error estimation functional with van der Waals correlation (BEEF-vdW), HSE06 density functionals, and the random phase approximation (RPA), a post-Hartree-Fock method based on many-body perturbation theory. We critically evaluate the performance of these methods and find that RPA appears to be the only method giving correct site preference, overall barrier, adsorption enthalpy, and surface energy. For all of the other methods, at least one of these properties is not correctly captured. These results imply that many density functional theory (DFT)-based methods lead to qualitative and quantitative errors in describing CO interaction with transition-metal surfaces, which significantly impacts the description of diffusion pathways. It is well conceivable that similar effects exist when surface reactions of CO-related species are considered. We expect that the methodology presented here will be used to get more detailed insights into reaction pathways for CO conversion on transition-metal surfaces in general and Cu in particular, which will allow us to better understand the catalytic and electrocatalytic reactions involving CO-related species.