Make Cookies: Cream together butter and sugar until light and fluffy, 2-3 minutes. In a medium sized bowl, whisk together flour, baking powder, and salt. Set aside. To the butter mixture, add the egg, milk, vanilla extract, and almond extract. Scrape down sides of the bowl, and beat on medium-high until fully incorporated, about 1 minute. Scrape down sides of the bowl again, and add dry ingredients. Mix on low until flour is fully incorporated, about 1 minute.

Dump cookie dough onto a clean work surface, and using your hands, shape dough into a 1-inch thick disc. Wrap in plastic wrap and refrigerate for 1 hour.

Preheat oven to 375°F. Line 2 baking sheets with parchment paper. Roll dough out to 1/4-inch thickness. Use cookie cutter to cut out ghost shapes and place on baking sheets, rerolling scraps as needed to cut out additional cookies. Bake until the tops just begin to take on color, about 9 minutes. Remove to a wire rack to cool completely, about 45 minutes.

Make Royal Icing: With the whisk attachment, whip egg whites, vanilla, and powdered sugar on low until combined, and then on medium-high until very glossy, about 6 minutes. Add water, 1/2 teaspoon at a time, to reach the consistency of toothpaste (the whisk should barely leave the shape of a peak in the frosting when lifted). Scoop 1/2 cup of the royal icing into a piping bag fitted with a #2 piping tip or with a very small hole cut at the end of the piping bag. To the remaining royal icing, add more water, 1/2 teaspoon at a time, until the icing slowly falls back into a smooth surface when the whisk is lifted (rather than creating a firm peak). You want this icing to still form a peak when the whisk is lifted, but the peak slowly dissolves into the remaining icing. When consistency is reached, transfer to other piping bag.

Use the thicker royal icing in the bag with the piping tip to pipe a white perimeter around 3 of the cooled cookies. Cut the end of the other piping bag and fill in the perimeter with the thinner royal icing, using a toothpick to evenly spread the icing across the cookie. Tap the cookie gently against the counter if bubbles appear on the surface. Repeat with remaining cookies, working in batches of 3. Allow cookies to sit out overnight so the royal icing fully dries.

Decorate Cookies: Place black decorating icing in a piping bag fitted with the #2 piping tip, and pipe two dots on a ghost’s head for the eyes. Underneath the eyes, pipe a larger oval for the ghost’s open mouth. Repeat with remaining cookies.