Grade book categories can be used to organize and group related grade items together. For example, you may want to create separate grade categories for Quizzes, Dropbox Submissions, Discussions, etc. By organizing your grades in this way, you can evenly distribute points between grade items in each category, or drop the lowest grade item(s) in a category.
From the Grades page, click on Manage Grades.
From the New menu, select Category.
Type a name for the category. Enter a short name that will be displayed as the heading in your gradebook column. You can also enter a description.
After you set up your grade categories, you can start to add grade items within the categories. Each grade item is associated with a single item that is assessed.