A cabinet assembly bore indexing tool and method provides facilitated bore indexing and guided drilling, while an assembly method helps to make the tool almost foolproof while reducing overall cabinet construction time and raising cabinet quality. The tool uses approximate or nominal material thickness blocks referred to as drill bushing blocks and adjustable axial length spacer sleeves in a floating spacer assembly to locate the drilled bores at the nominal center of the horizontal members and correspondingly in the reciprocal location on the internal surface near the edge of the vertical members so that when assembled they go together in perfect alignment. The cabinet assembly bore indexing tool indexes from an edge or surface to ensure front exterior matching upon assembly of a resulting rectangular annular shaped member as the basic unit upon which cabinet construction is based.