diff --git a/erpnext/accounts/doctype/pricing_rule/test_pricing_rule.py b/erpnext/accounts/doctype/pricing_rule/test_pricing_rule.py
index 7f9c55ff24f2..72961a6b6ec6 100644
--- a/erpnext/accounts/doctype/pricing_rule/test_pricing_rule.py
+++ b/erpnext/accounts/doctype/pricing_rule/test_pricing_rule.py
@@ -1237,6 +1237,68 @@ def test_priority_of_multiple_pricing_rules(self):
 		frappe.delete_doc_if_exists("Pricing Rule", "_Test Pricing Rule 1")
 		frappe.delete_doc_if_exists("Pricing Rule", "_Test Pricing Rule 2")
 
+	def test_pricing_rules_with_and_without_apply_multiple(self):
+		item = make_item("PR Item 99")
+
+		test_records = [
+			{
+				"doctype": "Pricing Rule",
+				"title": "_Test discount on item group",
+				"name": "_Test discount on item group",
+				"apply_on": "Item Group",
+				"item_groups": [
+					{
+						"item_group": "Products",
+					}
+				],
+				"selling": 1,
+				"price_or_product_discount": "Price",
+				"rate_or_discount": "Discount Percentage",
+				"discount_percentage": 60,
+				"has_priority": 1,
+				"company": "_Test Company",
+				"apply_multiple_pricing_rules": True,
+			},
+			{
+				"doctype": "Pricing Rule",
+				"title": "_Test fixed rate on item code",
+				"name": "_Test fixed rate on item code",
+				"apply_on": "Item Code",
+				"items": [
+					{
+						"item_code": item.name,
+					}
+				],
+				"selling": 1,
+				"price_or_product_discount": "Price",
+				"rate_or_discount": "Rate",
+				"rate": 25,
+				"has_priority": 1,
+				"company": "_Test Company",
+				"apply_multiple_pricing_rules": False,
+			},
+		]
+
+		for item_group_priority, item_code_priority in [(2, 4), (4, 2)]:
+			item_group_rule = frappe.get_doc(test_records[0].copy())
+			item_group_rule.priority = item_group_priority
+			item_group_rule.insert()
+
+			item_code_rule = frappe.get_doc(test_records[1].copy())
+			item_code_rule.priority = item_code_priority
+			item_code_rule.insert()
+
+			si = create_sales_invoice(qty=5, customer="_Test Customer 1", item=item.name, do_not_submit=True)
+			si.save()
+			self.assertEqual(len(si.pricing_rules), 1)
+			# Item Code rule should've applied as it has higher priority
+			expected_rule = item_group_rule if item_group_priority > item_code_priority else item_code_rule
+			self.assertEqual(si.pricing_rules[0].pricing_rule, expected_rule.name)
+
+			si.delete()
+			item_group_rule.delete()
+			item_code_rule.delete()
+
 
 test_dependencies = ["Campaign"]
 
diff --git a/erpnext/accounts/doctype/pricing_rule/utils.py b/erpnext/accounts/doctype/pricing_rule/utils.py
index 60c9e26aabeb..9c7911d7caee 100644
--- a/erpnext/accounts/doctype/pricing_rule/utils.py
+++ b/erpnext/accounts/doctype/pricing_rule/utils.py
@@ -174,12 +174,9 @@ def _get_pricing_rules(apply_on, args, values):
 
 
 def apply_multiple_pricing_rules(pricing_rules):
-	apply_multiple_rule = [
-		d.apply_multiple_pricing_rules for d in pricing_rules if d.apply_multiple_pricing_rules
-	]
-
-	if not apply_multiple_rule:
-		return False
+	for d in pricing_rules:
+		if not d.apply_multiple_pricing_rules:
+			return False
 
 	return True