Our brains are wired to see faces in everything we look at and if we can't see a face then we see an object. You know that test the psychiatrist show you with a squiggle abstract face and they tell you to tell them what it is you 'see'? Its just like that. When you're a child and scared about monsters and stuff your mind is going to show you something that isn't there!
You can probably tell if a child is telling the truth by the amount of times they talk about it, the details they give you and they don't keep changing the story. Depending on the type of appearance they had (Good or bad) they should be visibly shaken by it.