Once you have created the Attendance Activity, you have to set the attendance categories and grading options.
When you click on the activity, you will see a bar of options. The last one is More..., where you can find Status set.
You are presented with acronyms, attendance status descriptions, and grade (points) to assign.
By default, the status descriptions are Present, Late, Absent, and Excused, and the corresponding acronyms P, L, A, E.
If you decide to include the Attendance activity in the gradebook, you can assign points for each status.
You can change acronyms, descriptions, and grades (points) according to your preferences and then click on Update to save the new variables.