Hi,
However, I wouldn't call 'Yes, it does' incorrect.
In fact, 'Yes, they do' would be OK in a scenario where the person answering does not currently live with their family. eg a son at university might be talking about his parents and siblings who are still living at home.
You have to be cautious about words like 'correct / incorrect'. ![Smile [:)]](/emoticons/emotion-1.gif)
Clive