Step 1: To create gradebook categories you must choose "Grades" from under the Administration block.

Step 2: Choose the gray "Categories and Items" tab.

Step 3: To create a category choose the "Add Category" tab. Located on the bottom of the screen.

Step 4: Add your category name, category total, and parent category. Choose "Save Changes".

Step 5: Your gradebook will now show you your categories you created:

Click here to learn more about using the Gradebook and Grading.