Kitty has a good time on the day (4)
I believe the answer is:
fund
'kitty' is the definition.
(fund or money for a particular purpose)
'a good time on the day' is the wordplay.
'a good time' becomes 'fun' (I've seen this in another clue).
'on' says to put letters next to each other (in a down clue, letters appear on others).
'the day' becomes 'd' (abbreviation for day).
'fun'+'d'='FUND'
'has' acts as a link.
(Other definitions for fund that I've seen before include "Large stock; pay for" , "Pay for; kitty" , "Stock, resources" , "Pool - float" , "Sum of money set aside for a purpose" .)