diff --git a/app/coffeescripts/gradebook2/Gradebook.coffee b/app/coffeescripts/gradebook2/Gradebook.coffee
index 1687dd02138..a61ee84ddcc 100644
--- a/app/coffeescripts/gradebook2/Gradebook.coffee
+++ b/app/coffeescripts/gradebook2/Gradebook.coffee
@@ -389,8 +389,8 @@ define 'compiled/Gradebook', [
         $settingsMenu.find("##{setting}").prop('checked', @[setting]).change (event) =>
           @[setting] = $(event.target).is(':checked')
           $.store.userSet "#{setting}_#{@options.context_code}", (''+@[setting])
-          @gradeGrid.setColumns @getVisibleGradeGridColumns()
-          @gradeGrid.invalidate()
+          @gradeGrid.setColumns @getVisibleGradeGridColumns() if setting is 'show_attendance'
+          @buildRows()
 
       # don't show the "show attendance" link in the dropdown if there's no attendance assignments
       unless ($.detect @gradeGrid.getColumns(), -> this.object?.submission_types == "attendance")
@@ -430,7 +430,7 @@ define 'compiled/Gradebook', [
       res = []
       for column in @allAssignmentColumns
         submissionType = ''+ column.object.submission_types
-        res.push(column) unless submissionType is "not_graded" and !@include_ungraded_assignments or
+        res.push(column) unless submissionType is "not_graded" or
                                 submissionType is "attendance" and !@show_attendance
       res.concat(@aggregateColumns)
 
@@ -485,8 +485,6 @@ define 'compiled/Gradebook', [
           toolTip: true
           type: 'assignment'
 
-        if ''+assignment.submission_types is "not_graded"
-          columnDef.cssClass = (columnDef.cssClass || '') + ' ungraded'
 
         if fieldName in @assignmentsToHide
           columnDef.width = 10
@@ -562,7 +560,7 @@ define 'compiled/Gradebook', [
       @gradeGrid = @multiGrid.grids[1]
       @gradeGrid.onCellChange.subscribe (event, data) =>
         @calculateStudentGrade(data.item)
-        @gradeGrid.invalidate
+        @gradeGrid.invalidate()
       sortRowsBy = (sortFn) =>
         @rows.sort(sortFn)
         student.row = i for student, i in @rows
diff --git a/app/views/gradebook2/show.html.erb b/app/views/gradebook2/show.html.erb
index 98e59d9a072..60892cff3a8 100644
--- a/app/views/gradebook2/show.html.erb
+++ b/app/views/gradebook2/show.html.erb
@@ -34,7 +34,7 @@
       <li><a data-arrange-columns-by="due_date" href="#"><label><%= t('arrange_columns_by_due_date', 'Arrange columns by due date') %><input type="radio" name="arrange-columns-by" /></label></a></li>
       <li><a data-arrange-columns-by="assignment_group" href="#"><label><%= t('arrange_columns_by_group', 'Arrange columns by assignment group') %><input type="radio" name="arrange-columns-by" /></label></a></li>
       <li><a href="#"><label><%= t('show_attendance_columns', 'Show Attendance Columns') %> <input type="checkbox" id="show_attendance" /></label></a></li>
-      <li><a href="#"><label><%= t('include_ungraded', 'Include Ungraded Assignments') %><input type="checkbox" id="include_ungraded_assignments" /></label></a></li>
+      <li><a href="#"><label><%= t('include_ungraded', "Treat Ungraded as 0's") %><input type="checkbox" id="include_ungraded_assignments" /></label></a></li>
     </ul>
   </div>
   <div id="gradebook-grid-wrapper">
diff --git a/spec/selenium/custom_selenium_rspec_matchers.rb b/spec/selenium/custom_selenium_rspec_matchers.rb
index 7b49885d281..dd17206b61f 100644
--- a/spec/selenium/custom_selenium_rspec_matchers.rb
+++ b/spec/selenium/custom_selenium_rspec_matchers.rb
@@ -32,7 +32,7 @@ module CustomSeleniumRspecMatchers
       "expected #{@element.inspect} text to include #{@text}, actual text was: #{@element.text}"
     end
     def negative_failure_message
-      "expected #{@element.inspect} text to include #{@text}, actual text was: #{@element.text}"
+      "expected #{@element.inspect} text to NOT include #{@text}, actual text was: #{@element.text}"
     end
   end
 
diff --git a/spec/selenium/gradebook2_spec.rb b/spec/selenium/gradebook2_spec.rb
index 6c20b3ed8b1..a3a4db29c51 100644
--- a/spec/selenium/gradebook2_spec.rb
+++ b/spec/selenium/gradebook2_spec.rb
@@ -8,11 +8,13 @@ describe "gradebook2 selenium tests" do
   ASSIGNMENT_3_POINTS = "50"
   ATTENDANCE_POINTS = "15"
 
-  EXPECTED_ASSIGN_1_TOTAL = "100%"
-  EXPECTED_ASSIGN_2_TOTAL = "66.7%"
 
   STUDENT_NAME_1 = "nobody1@example.com"
   STUDENT_NAME_2 = "nobody2@example.com"
+  STUDENT_1_TOTAL_IGNORING_UNGRADED = "100%"
+  STUDENT_2_TOTAL_IGNORING_UNGRADED = "66.7%"
+  STUDENT_1_TOTAL_TREATING_UNGRADED_AS_ZEROS = "18.8%"
+  STUDENT_2_TOTAL_TREATING_UNGRADED_AS_ZEROS = "12.5%"
   DEFAULT_PASSWORD = "qwerty"
 
   def find_slick_cells(row_index, element)
@@ -36,7 +38,7 @@ describe "gradebook2 selenium tests" do
     cell.text
   end
 
-  def open_gradebook_settings(element_to_click)
+  def open_gradebook_settings(element_to_click = nil)
     driver.find_element(:css, '#gradebook_settings').click
     driver.find_element(:css, '#ui-menu-0').should be_displayed
     element_to_click.click if element_to_click != nil
@@ -59,6 +61,30 @@ describe "gradebook2 selenium tests" do
     driver.find_element(:css, '#ui-menu-1').should be_displayed
   end
 
+  def final_score_for_row(row)
+    grade_grid = driver.find_element(:css, '#gradebook_grid')
+    cells = find_slick_cells(row, grade_grid)
+    cells[4].text
+  end
+
+  # `students` should be a hash of student_id, expected total pairs, like:
+  # {
+  #   1 => '12%',
+  #   3 => '86.7%',
+  # }
+  def check_gradebook_1_totals(students)
+    get "/courses/#{@course.id}/gradebook"
+    # this keep_trying_untill is there because gradebook1 loads it's cells in a bunch of setTimeouts
+    keep_trying_until {
+      students.each do |student_id, expected_score|
+        row_total = driver.find_element(:css, ".final_grade .student_#{student_id}").text
+        # gradebook1 has a space between number and % like: "33.3 %"
+        row_total = row_total.sub ' ', ''
+        row_total.should eql expected_score
+      end
+    }
+  end
+
   before(:each) do
     course_with_teacher_logged_in
 
@@ -150,10 +176,17 @@ describe "gradebook2 selenium tests" do
                                                   :assignment_group => @group,
                                               })
 
+    @ungraded_assignment = @course.assignments.create! :title => 'not-graded assignment',
+                                                       :submission_types => 'not_graded'
+
     get "/courses/#{@course.id}/gradebook2"
     wait_for_ajaximations
   end
 
+  it "should not show 'not-graded' assignments" do
+    driver.find_element(:css, '#gradebook_grid .slick-header').should_not include_text(@ungraded_assignment.title)
+  end
+
   it "should validate correct number of students showing up in gradebook" do
     driver.find_elements(:css, '.student-name').count.should == @course.students.count
   end
@@ -182,55 +215,61 @@ describe "gradebook2 selenium tests" do
   end
 
   it "should validate initial grade totals are correct" do
-    grade_grid = driver.find_element(:css, '#gradebook_grid')
-    first_row_cells = find_slick_cells(0, grade_grid)
-    second_row_cells = find_slick_cells(1, grade_grid)
+    final_score_for_row(0).should eql STUDENT_1_TOTAL_IGNORING_UNGRADED
+    final_score_for_row(1).should eql STUDENT_2_TOTAL_IGNORING_UNGRADED
+  end
 
-    #validating first student initial total
-    validate_cell_text(first_row_cells[4], EXPECTED_ASSIGN_1_TOTAL)
+  it "should treat ungraded as 0's when asked, and ignore when not" do
+    # make sure it shows like it is not treating ungraded as 0's by default
+    is_checked('#include_ungraded_assignments').should be_false
+    final_score_for_row(0).should eql STUDENT_1_TOTAL_IGNORING_UNGRADED
+    final_score_for_row(1).should eql STUDENT_2_TOTAL_IGNORING_UNGRADED
 
-    #validating second student initial total
-    validate_cell_text(second_row_cells[4], EXPECTED_ASSIGN_2_TOTAL)
+    # set the "treat ungraded as 0's" option in the header
+    open_gradebook_settings(driver.find_element(:css, 'label[for="include_ungraded_assignments"]'))
+
+    # now make sure that the grades show as if those ungraded assignments had a '0'
+    is_checked('#include_ungraded_assignments').should be_true
+    final_score_for_row(0).should eql STUDENT_1_TOTAL_TREATING_UNGRADED_AS_ZEROS
+    final_score_for_row(1).should eql STUDENT_2_TOTAL_TREATING_UNGRADED_AS_ZEROS
+
+    # reload the page and make sure it remembered the setting
+    get "/courses/#{@course.id}/gradebook2"
+    wait_for_ajaximations
+    is_checked('#include_ungraded_assignments').should be_true
+    final_score_for_row(0).should eql STUDENT_1_TOTAL_TREATING_UNGRADED_AS_ZEROS
+    final_score_for_row(1).should eql STUDENT_2_TOTAL_TREATING_UNGRADED_AS_ZEROS
+
+    # NOTE: gradebook1 does not handle 'remembering' the `include_ungraded_assignments` setting
+
+    # clear our saved settings
+    driver.execute_script '$.store.clear();'
   end
 
   it "should change grades and validate course total is correct" do
     expected_edited_total = "33.3%"
-    grade_grid = driver.find_element(:css, '#gradebook_grid')
-    first_row_cells = find_slick_cells(0, grade_grid)
-    second_row_cells = find_slick_cells(1, grade_grid)
 
     #editing grade for first row, first cell
-    edit_grade(first_row_cells[0], 0)
+    edit_grade(driver.find_element(:css, '#gradebook_grid [row="0"] .l0'), 0)
 
     #editing grade for second row, first cell
-    edit_grade(second_row_cells[0], 0)
+    edit_grade(driver.find_element(:css, '#gradebook_grid [row="1"] .l0'), 0)
 
-    #page refresh
+    #refresh page and make sure the grade sticks
     get "/courses/#{@course.id}/gradebook2"
     wait_for_ajaximations
+    final_score_for_row(0).should eql expected_edited_total
+    final_score_for_row(1).should eql expected_edited_total
 
-    #total validation after page refresh
-    grade_grid = driver.find_element(:css, '#gradebook_grid')
-    first_row_cells = find_slick_cells(0, grade_grid)
-    second_row_cells = find_slick_cells(1, grade_grid)
-    first_row_total = validate_cell_text(first_row_cells[4], expected_edited_total)
-    second_row_total = validate_cell_text(second_row_cells[4], expected_edited_total)
-
-    #go back to grade book one get those total values and compare to make sure they match
-    get "/courses/#{@course.id}/gradebook"
-    wait_for_ajaximations
-    # this keep_trying_untill is there because gradebook1 loads it's cells in a bunch of setTimeouts
-    keep_trying_until(5) {
-      # gradebook1 has a space between number and % like: "33.3 %"
-      gradebook1_first_row_total = driver.find_element(:css, ".final_grade .student_#{@student_1.id}").text.sub ' ', ''
-      first_row_total.should eql gradebook1_first_row_total
-    }
-    gradebook1_second_row_total = driver.find_element(:css, ".final_grade .student_#{@student_2.id}").text.sub ' ', ''
-    second_row_total.should eql gradebook1_second_row_total
+    #go back to gradebook1 and compare to make sure they match
+    check_gradebook_1_totals({
+      @student_1.id => expected_edited_total,
+      @student_2.id => expected_edited_total
+    })
   end
 
   it "should validate that gradebook settings is displayed when button is clicked" do
-    open_gradebook_settings(nil)
+    open_gradebook_settings
   end
 
   it "should validate row sorting works when first column is clicked" do
@@ -244,7 +283,7 @@ describe "gradebook2 selenium tests" do
     #filter validation
     validate_cell_text(meta_cells[0], STUDENT_NAME_2 + "\n" + @other_section.name)
     validate_cell_text(grade_cells[0], ASSIGNMENT_2_POINTS)
-    validate_cell_text(grade_cells[4], EXPECTED_ASSIGN_2_TOTAL)
+    validate_cell_text(grade_cells[4], STUDENT_2_TOTAL_IGNORING_UNGRADED)
   end
 
   it "should validate setting group weights" do
@@ -293,22 +332,6 @@ describe "gradebook2 selenium tests" do
     open_gradebook_settings(driver.find_element(:css, '#ui-menu-0-6'))
   end
 
-  it "should validate include ungraded assignments option" do
-    pending("new changes broke this link, clicking include ungraded assignments doesn't make grade totals change anymore'")
-    expected_total_row_1 = "19%"
-    expected_total_row_2 = "13%"
-    open_gradebook_settings(driver.find_element(:css, '#ui-menu-0-7'))
-    grade_grid = driver.find_element(:css, '#gradebook_grid')
-    first_row_cells = find_slick_cells(0, grade_grid)
-    second_row_cells = find_slick_cells(1, grade_grid)
-
-    #validating first student total after ungraded option click
-    validate_cell_text(first_row_cells[4], expected_total_row_1)
-
-    #validating second student total after ungraded option click
-    validate_cell_text(second_row_cells[4], expected_total_row_2)
-  end
-
   it "should validate posting a comment to a graded assignment" do
     comment_text = "This is a new comment!"