Behold! This is a white bedsheet with some holes cut into it (or possibly, out of it) in classic Halloween Ghost fashion. Don't let mom find out that you've taken a scissors to her best linens, or a rock won't be the worst thing you get for Halloween.
The prior line is likely a reference to the movie Beetle Juice. Charles Deetz makes the same remark when he meets one of the ghosts (Barbara and Adam Maitland), suspecting the ghost is actually his daughter Lydia.